VIETNAM NATIONAL UNIVERSITY - HCMC

INTERNATIONAL UNIVERSITY
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Lecturer: Mr. Duong Vo Nhi Anh

Topic: Supply Chain Management of
Vinamilk

Group members:
1.
2.
3.
4.
5.
6.
7.

Nguyễn Trần Quang Linh – IELSIU17036
Nguyễn Duy Thuận – IELSIU17083
Nguyễn Cao Trí – IELSIU17122
Trần Lê Huy Cảnh – IELSIU17029
Đặng Chí Tài – IELSIU17090
Đỗ Đức Trí Nhân – IELSIU17088
Nguyễn Minh Khôi – IELSIU17032


Contents

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OVERVIEW
 Purpose:
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Learn about the supply chain management of Vinamilk.

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Main contents:

1.

Introduction of the company.

2.

Analysis every single parts of its supply chain.

3.

Conclusion about the supply chain management of the company and giving

recommendations to optimize the system.
 Company: Vietnam Dairy Products JSC
 Subject of research:
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Subject of research: elements of Vinamilk’s supply chain.


I.

INTRODUCTION
1. Establishment:

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The company was established in 1976 as the state-owned Southern Coffee-Dairy Company, to
nationalize and take over the operations of three previously private dairy factories in South
Vietnam: Thong Nhat Dairy Factory (formerly known as Foremost factory), Truong Tho Dairy
Factory (formerly known as Cosuvina factory) and Dielac Powdered Milk Factory (formerly
known as Nestlé factory (Swiss).
The company was renamed to United Enterprises of Milk Coffee Cookies and Candies in 1978.
It became the Vietnam Dairy Company, formally established in 1993. In 2003, following its IPO
to the Ho Chi Minh Stock Exchange, the company legally changed its name to Vietnam Dairy
Products Joint Stock Company (Vinamilk).

2. Company information:
Transaction name: Vietnam Dairy Products Joint Stock Company (Vinamilk)
Address: No. 10, Tan Trao Street, Tan Phu Ward, District 7, HCMC
Telephone No.: (028) 54 155 555
Fax No.: (028) 54 161 226
Website: www.vinamilk.com.vn
Email address:
Stock code: VNM


3. Achievements:
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Forbes Global 2000: #1888 Forbes Asia's Fab 50


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15th largest company in Vietnam and the most valuable public company listed in Vietnam
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based on the UNDP 2007 Top 200 largest firms in Vietnam report.

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4. Products:
a) Dairy products:
- Milk: 100% fresh milk, pasteurized milk, organic milk, coconut milk with ADM GOLD,
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Flex, Super SuSu.
Yogurt: eaten yoghurt, yoghurt drink with brands SuSu, Probi, ProBeauty.
Milk Powder: Dielac, Alpha, Pedia, Grow Plus, Optimum Gold, Ridielac Nutritional
Powder, Adult Milk Powder such as Diecerna for Diabetes, SurePrevent, CalciumPro,

Mama Gold.
- Condensed milk: Southern Star and Ong Tho.
b) Soy milk – Soft drinks:
- Vfresh juice, Icy bottled water, GoldSoy soy milk.



II.

Procurement
1. Suppliers

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The company has actively invested in industrial farms:
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At present, Vinamilk is directly managing two
subsidiaries namely Vietnam Dairy Cow Company
Limited (100% charter capital) and Thong Nhat
Thanh Hoa Company Limited (owns 96.11% of
capital chartered) with a total of 10 farms from north
to south.
The goal of Vinamilk is to reach 40,000 to 50,000
cows in 2021.
Moreover, Vinamilk has built Organic Dairy Farm at
Dalat, VietNam which is the first organic dairy farm
in Vietnam recognized by the Organic Certification
Organization of the European Union.

On the other hand, Vinamilk is constantly improving the purchasing and development of raw
milk from the households:

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Create a source of output and reasonable prices for the suppliers.
Support farmers to develop the production line and improve the efficiency.
Promote the development of related agricultural products such as agricultural products
for dairy herds (e.g. maize, elephant grass, fresh straw ...).
Conducted 44 training courses nationwide with the participation of 1,605 households
with the topic "Technical Guidelines on dairy farming".

2. Materials
All of Vinamilk's products are produced on modern machinery and equipment from Sweden,
European countries - G7 and strictly controlled by quality management system according to
international standard ISO.

III.

MANUFACTURING
1. Factory system:

Vinamilk has a big factory system all around Vietnam. The network consists of 13 modern plants
across Vietnam, including one of only three MEGA DAIRY PLANTS in the world:


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•
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•
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Thong Nhat Dairy Factory
Truong Tho Milk Factory
Dielac Milk Factory
Can Tho Milk Factory
Sai Gon Milk Factory
Binh Dinh Dairy Factory
Nghe An Dairy Factory
Lam Son Dairy Factory
Tien Son Dairy Factory
Da Nang Milk Factory
Beverage Factory Vietnam
Vietnam Flour Milk
Vietnam Dairy Plant
(MEGA)

The plants are located near the
dairy farms to optimize
transportation, helping to preserve
the highest milk quality for the consumers.

2. Vinamilk MEGA Factory:

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One of the most remarkable point about Vinamilk’s factory system is the MEGA Factory.
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Vinamilk’s MEGA Factory is known as their biggest factory in Vietnam, this factory is also one

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of only 3 MEGA Factories all around the world. The location of the plant is in Binh Duong
province, which is near to the raw material area to helps optimize transports process and ensure

milk quality. The company is so proud of their factory because of the significant technology,
advanced automated and integrated production lines inside the factory.
a) Giant refrigeration tank systems:
Raw milk is always stored cold in 3 modern tanks with the largest capacity in Vietnam. Each
tank has an impressive capacity of 150m3, holding more than 1450 tons of fresh milk.
b) Bactifugation technology:
This technology is used to eliminate most harmful bacteria effectively and preserves the milk’s
wholesome nutrients and natural flavors.
c) Automated and integrated process:


The factory is totally equipped with world-class automated and integrated
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dairy production lines, 100% automatic process from the incoming raw

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materials to the finished product at the warehouse. The production process is
completely automated using Tetra Master Plant integration technology which
helps Vinamilk monitor, manage, and continuously control the production process and product
quality.
d) LGV Intelligent Robots:
The LGV robot is one of the world’s most advanced
robots with a lightweight, swift operation and low
energy consumption. LGV robots operate fully
automatically and are controlled by a central computer
system to make sure smooth and efficient transferring
process within production and finished products to the
Smart Warehouse.

3. Automatic production line:
Vinamilk has more than 7,800 employees in
their factories to run the production line
everyday.
The Vietnam Dairy Factory is equipped with
modern fresh milk production lines applied
state-of-the-art production technology, operated
with completely closed process from raw material input to finished product output.


After tested for quality, raw milk will be weighed, filtered and entered into a cold storage silo
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tank system (150m / tank).

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After cold storage, raw milk will be processed, i.e. centrifugated, homogenized, pasteurized,
cooled to 4oC then transferred to tanks and ready for UHT sterilization. Centrifugal separator
helps to eliminate almost pathogens and spores.
State-of-the-art UHT sterilization system can heat the milk up to 140oC and cold down to 25oC
quickly, helps to keep the natural flavor, nutrients, vitamins and minerals of the product. Milk is
pumped to aseptic tanks before aseptic filling.
The combination of advanced processing technology, UHT Sterilization and aseptic filling helps
product remain fresh taste during 6 months without any preservative.


IV.

WAREHOUSE
1. Warehouse service

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Vinamilks has two logistics centers
nationwide:
• Ho Chi Minh City Logistics
•

Enterprise
Ha Noi Logistics Enterprise

2. Smart Warehouse system:
Vinamilk owns the first and largest Smart
Warehouse in Vietnam. It has an area of 6 ha, with 20 terminals, is 105m in length and 35m in

height, includes 17 shelving floors and has a capacity of nearly 30,000 cargo lots. The operation
is fully automated and controlled by robots in coordination with 15 self-propelled vehicles on a
370-meter long rail system.
 Smart warehouse in MEGA Factory in Binh Duong:
The warehouse is the leading smart warehouse in Vietnam which has an area of 6000 m2 with 20
entrances and exits, width of 105 m, height of 35 m. It is designed with 17 stores, containing up
to 27168 lots. Automatic import and export with 15 Rail guided vehicles (RGV) transport pallets
of finished product to warehouse and then 8 stacker cranes align them to the shelf system.
Besides, the warehouse consists of many modern technologies such as:
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LGV Intelligent Robots:

LGV automatic robots move pallets of
finished product to the smart warehouse.
Furthermore, LGV robots also transport


packaging materials to filling machines. They can recharge themselves without human
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intervention.

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Tetra Plant Master Automation solution:

The operating system is based on the Tetra Plant Master Automation solution, which is the
integration, enables to connect entire plant from raw materials to finished products. According to

that, people can control every activity in the factory, monitor and control the quality
continuously. The Tetra Plant Master system also provides all the necessary data that helps to
continuously improve its production and maintain operations.
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Wamas software:

The management of import and export goods is
controlled by Wamas software. This is the software
provided by SSI Schaefer, specializing in order
processing, cargo movement and resource optimization,
along with the provision and analysis of Logistics
performance data. In addition, Wamas Warehouse
Management System integrated ERP management
system and Tetra Plant Master Automation solution provides integrated operation of the plant
from production planning, material input to the finished product output.

V.

DISTRIBUTION & DELIVERY
1. Distribution

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• Local market
Nearly 251,000 retail points served directly by
202 distributors.


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418 stores.
Over 3,250 supermarkets and conveniencePage
stores across the country.

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Besides, Vinamilk has two main distribution channels for the local market
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Distribution via traditional channels: Vinamilk has associated with 232 independent
distributors and over 178,000 retail points. Moreover, the company opens 14 showrooms in
Hochiminh City, Hanoi, Danang, Cantho to reach the customer easier.
These numbers show a giant distribution system of Vinamilk throughout

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the traditional channels.
Distribution via modern channels: Vinamilk distributes their products

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by connect with Coop mart, Vinmart, BigC, …
• International market
4 new markets: New Zealand, Brunei, Madagascar, Yemen.
Vinamlik also focus on new markets in Africa and South East Asia

by Unknown Author is licensed under

besides traditional markets in the Middle East.

In order to has a better management for their distribution system, Vinamilk has applied some
modern technologies into their system like: ERP or CRM.

2. Delivery
Vinamilk cooperates with some 3PL companies to deliver their products, there are some famous
names we can list down like:
•
•
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ABA Business Solutions Corporation (ABA Cooltrans)
Gemadept Corporation
Phu Thai Trading and Logistics Corporation


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VI.

RETAILS & CUSTOMER
1. Retails system:

Vinamilk mainly distributes their products via 3 ways:
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Wholesalers

Retailers (212,000 places)
Distributers (545 stores)

Moreover, their products are available in 1.500 supermarkets, over 600 convenient stores in
Vietnam and have been exported to 43 foreign countries all over the world.
Overseas stores system:


Although Vinamilk focuses on the interior market, they have now expanding their attention to
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ASEAN, especially, Chinese market, because of the potential.

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Until now, Vinamilk is widely available in 43 countries all over the world, including some which
have high requirement of nutrition such as Japanese, Australia, America, …
Vinamilk holds 22.8% of Miraka factory (New Zealand),100% of Drifwood factory (America),
100% of Angkor factory (Campodia), opens trading centers in Thailand and some small
companies in different countries.

Connection between retail points and distribution centers:
Vinamilk mainly distributed through 2 channels:
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Traditional channel: distributes more than 80% products of the company.
Modern channel: This is one of the advantages of the company because of the coverage.

Vinamilk manages their distribution channel by using ERP, CRM, and services from Oracle.


2. Customer services:
Vinamilk provides many programs that delivers the best to their customers, includes:
•
•
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Nutrition consulting
Promotions
Provide products as required
Q&A


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VII.

SUMMARY


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REFERENCES
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Work division:

Name
Nguyễn Trần Quang Linh

Charge section
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Leader

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Presenter

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Warehouse part

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Report

Nguyễn Duy Thuận

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Introduction and Procurement parts


Nguyễn Cao Trí

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Introduction and Procurement parts

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Presenter

-

Presenter

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Manufacturing part

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Powerpoint file

Trần Lê Huy Cảnh

Đặng Chí Tài


Đỗ Đức Trí Nhân


Nguyễn Minh Khôi

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Page & delivery part
Distribution

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Report

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Distribution & delivery part

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Presenter

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Report

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Retail & Customer part

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Presenter


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